Cairn Energy gets approval to develop Rajasthan fields

JAIPUR — The Scottish oil explorer Cairn Energy announced yesterday that it had had won the final nod from the Indian government for its Rajasthan field development plans after signing a new $1 billion bank facility.

By From Our Correspondent

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Published: Tue 4 Jul 2006, 10:46 AM

Last updated: Sat 4 Apr 2015, 2:56 PM

Cairn in a statement said approval was given for the first four plans for the Mangala, Aishwariya, Saraswati and Raageshwari fields in Block RJ-ON-90/1, in Rajasthan.

The Edinburgh-based firm said that $850 million of a new $1 billion bank facility would be used to fund Cairn's share of the Rajasthan plans and that it was on track to list its Indian business in Mumbai by the end of March 2007.

Cairn recently estimated there were more than 3.5 billion barrels of oil in place in its key Rajasthan exploration block in northwest India, up from about 2.5 billion previously.

"Obtaining government approval for the Mangala, Aishwariya, Saraswati and Raageshwari fields in Rajasthan and securing finance for the first phase of the developments is a significant achievement on the path to first oil," Cairn Chief Executive Bill Gammell said in a statement.

Cairn said in March that it was considering a partial flotation of its core Indian exploration and production business and that it would return any proceeds from a Bombay Stock Exchange listing to shareholders.

The firm expects to publish its results for the half year to end-June in early September. Meanwhile, the Rajasthan Government has asked the central government for a higher share of profits in a 50:50 ratio from sale of oil or gas produced from exploration blocks within the state and operated as joint venture.

Rajasthan Minister of Mines, Forests and Environment L N Dave has written to Union Minister for Petroleum and Natural Gas Murli Deora in this regard.

Dave in his letter asked the central government to review the issue of sharing 'profit petroleum' for joint venture (JV) blocks equivalent to the new exploration licensing policy (NELP) blocks.

'Profit petroleum' is made when exploration blocks start to pay returns after the investments costs have been recovered.

The state government has sought a higher share in profits from blocks held by Cairn Energy and Focus Energy, both of whom has made good discoveries of oil and gas discoveries in their joint venture blocks.

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